Open AccessThe Fiscal Effects of Tax Increment Financing on Rural School Districts: The Case of Iowa
Author(s) -
Phuong NguyenHoang
Publication year - 2021
Publication title -
aera open
Language(s) - English
Resource type - Journals
ISSN - 2332-8584
DOI - 10.1177/2332858421991149
Subject(s) - property tax , residential property , property value , economic growth , rural area , business , demographic economics , economics , public economics , geography , tax reform , finance , political science , economic geography , real estate , law
Tax increment financing (TIF)—an economic (re)development tool originally designed for urban cities—has been available to rural communities for decades. This is the first study to focus solely on TIF in rural school districts, to examine TIF effects on school districts’ property tax base and rates, and to conduct event-study estimations of TIF effects. The study finds that TIF has mostly positive effects on rural school districts’ property tax base and mixed effects on property tax rates, and that TIF-induced increases in tax base come primarily from residential property and slightly from commercial property. The study’s findings assert the importance of returned excess increment if rural school districts in Iowa and many other states are to benefit from TIF.